Now let's be clear, do patterns work? Let's discuss) - page 11
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Quite right, it's not easy. But if you know the reasons why your algorithm is profitable, then programming the absence of the right market conditions is not a big problem. I wasn't writing about the general case, but about mine in particular. My TS works this way.
You can't do everything...
I developed a trading system based on flipping a coin (random process, and this is not a joke), on some series of random numbers is able to show the uptrend in profitability of 200-300 deals (!), (at a profit equal to loss), and this despite the fact that the system is a deliberately random.
I understood correctly, you are saying about possibility of total profitability on a random process?
Sergey, the key phrase here is highlighted:
I don't know how C-4 is going to answer your snide question in light of this highlighting.
Am I correct in assuming that you are claiming the possibility of statistically significant profiling on a random process?
Yes, I do and in fact I can prove it.
You, as programmers, understand that the EA cannot flip a real coin. It's an electronic EA that's why it uses rand() function as a coin. Again, you know very well that the rand() function outputs pseudo-random numbers. That is, there is one giant array (about four billion numbers, depending on implementation of the function), and rand() function just gives those numbers starting from a certain point. This starting point is set with another function srand(). Since the Expert Advisor uses a strictly limited amount of random numbers equal to the amount of deals (each deal has its own random number), we randomly (fundamental point) select the reference point from which we start receiving a series of random numbers. Profitability graph is very strongly (with some combinations of profit/loss) dependent on a particular series of random numbers. This is exactly the technical point I meant when I said "on some series of random numbers".
Here is another interesting graph: the graph of profit/loss on a coin. It is a deliberately random process but the yield graph clearly draws so-called technical analysis patterns such as "head and shoulders", "double top/top trough", Elliot waves, trend channels and much more. I am sure that if we connect technical indicators such as MACD to this chart, they will also give great signals for entering, such as convergence/divergence. In a half-joking manner I tried to perform a "technical analysis" of a chart with a deliberately random structure. As it turned out it was pretty damn funny. On it (the chart) we can clearly see one uptrend with duration of about 500 trades of no less than 2,5 years (we can speak about a representative sample, I think that's what you probably meant by the word "statistically"), and this is! True, the profit here is less than the stop, but it does not change the essence.
What's there to explain a hundred times, when you can try it many times yourself. I'm giving you this "wonder of the devil's mind" and you will see what a random uptrend is. And what common misconceptions are associated with it.
So, to summarise, C-4, what you have said.
1. The random number generator implemented in MQL is pseudo-random with a series length of 10^9. No argument with that.
2.THE PROFITABILITY GRAPH OF FLIPPING A COIN. It is inevitably a random process, but the graph of yields clearly draws the so-called figures.
Also it is correct and proves the fact that all TA figures are based on fraud - they are not worth a dime, because with the same frequency they occur on the diagram of a random process which is statistically impossible to win or lose (it is proved in game theory). Also, a graph of a random process can draw anything, as long as the length is long enough. In that sense, if you encode each letter of the alphabet with a combination of 0-1 and put the price increments in plus -1 and in minus - 0, you can obviously find an inseparable plot for a din series with an EXACT reproduction of the content of the Bible!
And the trends you highlighted on your occasional BP are called stochastic. You cannot make money on them because you cannot tell when they will start and when they will end. On a sufficiently long BP, trade on such trends will bring profit no more than 1/n, where n is the number of performed transactions, i.e. it will tend to zero. It is in contrast to deterministic trends, on which one can and should make profit. Exactly identification of such trends on quotes is the main task of a real trader.
That is all for now.
Absolutely right!!!
IMHO on the topic of the branch:
What is a pattern?
It is a necessary, essential, constantly recurring relationship of phenomena (i.e. a cycle), right?
If so, then the universal formula to describe a 100% regularity in the market(and everywhere else) is very simple: for(int i=1;i<=1;i++) ;)
Everything is 100% repeatable, no matter how you spin it, so patterns work, and they are everywhere ;)
What do you say about patterns in general?
So far I have only noticed one pattern. It is that any trend always rolls back a minimum of 38.2%. Sometimes more, but never less. The other so-called patterns are confirmed with a 50% probability.
So what patterns do you know? The fact that the Head & Shoulders figure always predicts a reversal? is not a pattern as it does not always predict a reversal. Or maybe MA crossing the price from bottom to top predicts the beginning of a bullish trend? That too is 50/50. And it is certainly not a pattern. Any other supercomplex indicators and systems also cannot find a pattern and predict the future. The only pattern I have found is that any trend pulls back at least 38.2% sooner or later. But even knowing this pattern is not enough to make a profit.
Ah yes, there is another pattern. The deposit always follows the path of least resistance, i.e. it always goes to the bottom.
The market as a "chaotic wagging of the tail"
what do you think of the different patterns?
Do you see them?)
The market is full of so many patterns that you never know which one will work))) You have to look for a pattern among the patterns))) and so on and the deeper the better)) I guess)